Financial Newsletter Sunshine Coast

Welcome to Unique Financial Partnerships, keeping you up to date with all financial planning, self managed superannuation funds, tax minimisation, life insurance, on the Sunshine Coast and around Australia.

The information in this newsletter is current at the time of printing. Contact us for updates.

Contribute longer
The new superannuation rules recognise that not everyone wants to retire early.  You can salary sacrifice and make personal contributions until you are age 75, it was age 70 previously.  This means that strategies to minimise tax and maximise superannuation can now continue for a longer period.

For instance, you can salary sacrifice as much as possible to superannuation and replace your income with an income stream from super.  After age 65 the income stream will have no restrictions.  You can cash it in or take as much income each year as you wish and it's all tax free.

Make an income stream more tax effective
The new superannuation rules include a more flexible and tax effective style of income stream.  If you are under age 60 and have started an income stream it will be taxable.  We recommend a review to see if converting the income stream to the new style will provide a better result for you.  Our experience to date suggests that many people are better off after conversion.

If you are getting near to age 60, it may be better to defer receiving income stream payments until your birthday and then catch up when the payments are tax free.

Lock in a TAP before it's too late
There is a special type of income stream that can help retirees qualify for an increased age or service pension.  If you have money in superannuation you can buy a Term Allocated Pension (TAP) otherwise you can buy an annuity.  Both these products are 50% exempt from the assets test used by Centrelink and DVA to assess pension eligibility.

TAP's and annuities are available until 20 September 2007 and will retain their exemption after this date.  All income streams started after 20 September 2007 will be 100% assessable.  This is the last opportunity to use these products to reduce your assessable assets and qualify for a part pension and the associated concessions.

Your Futuro adviser can help you make the most of the new opportunities

Planning for success

Most of us have financial goals at various stages of our lives, be it buying our first home, bringing up a family and providing for our children's education, or providing for a comfortable retirement.  Some will be more successful than others.  Rarely does success in life come without planning or, as a wise man once said, most people don't plan to fail they just fail to plan.  The results of this can be seen by looking at the people around you.

The first step to becoming financially independent is to clearly define where you are now and determine your future goals and objectives.  With clearly defined goals you can plan how you will reach them.

An understanding of your current financial position is essential.  An excellent aid is a simple computer program such as Quicken (Personal Plus edition) or Microsoft Money.  They are inexpensive but invaluable in analysing your position, helping you to plan ahead and establishing your budget.

Planning your budget
The preparation of a budget is essential to plan the way ahead.  The basic steps you need to complete are:

• Identify and write down your goals.  These may include items such as saving for a house, paying off current debts, saving for your children's education or planning your retirement.
• Break your goals into short term (1 year or less); medium-term (1-5 years) and long term (5+ years) and build these into your budget.
• Study your savings and investment options, get to understand financial markets, seek advice and draw up a long-term financial plan that you fully understand and are comfortable you can achieve.  Professional advice with this step will prove invaluable.
• Review your progress monthly, quarterly and annually to be sure you remain on track.  If necessary, review your approach and make any necessary changes.

There are only three ways to increase your savings:

• Reduce your expenses
• Increase your income
• Make your assets work harder.

Incorporate all three into your plan. 

Discipline is essential for success, so determine to set aside a certain amount from each pay to either reduce debt or increase savings.  Consider studying for higher qualifications, enabling you to obtain a better salary.  Financial strategies for speeding the repayment of your mortgage and freeing up funds for additional investment may also assist in bringing those long term goals within reach.

One thing is certain - if you fail to plan for success you are unlikely to achieve it!  The earlier you seek professional advice and draw up your plan, the sooner you are likely to achieve your goals.  Your Futuro adviser is the ideal tutor through your planning process.

Overworked? need a break?

There are times in life when due to work, personal or health stresses you need a serious break from everyday life.  At times like these there is little to beat a European River Cruise for the ultimate in a relaxing holiday.

Many luxury ships cruise the great rivers of Europe taking you right to the centre of small historic towns and great cities.  You may travel from Amsterdam along the Rhine, Main and Danube rivers to Constanza on the Black Sea - a distance of 3,500 km, through nine countries, all without repacking your bags!

River ships typically carry around 150 passengers in a high degree of comfort.  There are no night clubs or casinos but local entertainment is provided.

History buffs will appreciate visiting historic towns such as Regensburg, Passau, Vienna, Budapest and Melk, with its great Abbey established in 1089.  Those with a taste for the grape will enjoy sampling produce from the many vineyards along the way.  You may enjoy the scenery from the windows of your cabin, the lounge or on deck, with shore excursions available to the major points of interest.

Cruises are available on the Rhine, Danube, Moselle, Volga and several smaller rivers in northern Italy France and Spain.  Generally, river cruises range from 7 to 21 days with the most popular being 14 days from Amsterdam to Budapest.

So if you need a really relaxing break, talk to your travel agent about a European River Cruise.

Disclaimer
All representations and information contained in Futuro in Focus are made in good faith and are believed to be correct at the time of preparation. Articles are of a general nature and they do not purport to be specific investment advice. Individual needs or other considerations have not been taken into account, thus information contained herein should not be relied upon as a substitute for detailed advice. Futuro Financial Services will receive fees or brokerage from the provision of advice or placement of investments. You may, by contacting our Privacy Officer on 07 3018 0400 or by writing to Futuro Financial Services Privacy Officer GPO Box 942 Brisbane QLD 4001, request not to receive further editions of Futuro in Focus.